Investment model
Acumen's model is to invest as equity or debt in social enterprises, both for-profit or non-profit organizations, that are serving people living below, at or slightly above the poverty line. Key to their model is patient capital, allowing an extended timeline for a return (7–12 years). [7] They are looking for a 1x return across their portfolio of investments and they re-invest their gains. In choosing these organizations, Acumen tends to focus on companies working in off-grid, renewable energy and agriculture. [8]
When investing in businesses, Acumen measures success in the number of lives reached in bottom of the pyramid markets. For them, success is correlated with the social change that occurs in people's lives. For example, when looking to invest in a company that makes and distributes anti-malarial bed nets, Acumen uses numbers to measure the social impact of this company. This means that greater number of anti-malarial bed nets manufactured and distributed, the more impact the company made. If a company builds toilets and shower facilities in urban slums and business districts, the success of this investment is measured by the number of times the toilet and shower facilities are used. [9]
Acumen measures the immediate output and considers it when looking for businesses to invest in, but does not focus on whether these social changes are contributing to decrease in malaria or improvement in health and environment. Its former CEO, Brian Trelstad argues that the latter approach is complicated, expensive and impractical for emerging companies. Instead, Acumen measures between output and impact, i.e. distribution of bed nets to reduction of malaria. [9]
Programs and funds
Enhanced Livelihood Investment Initiative
In 2015, Acumen, Unilever and the Clinton Guistra Enterprise Partnership, part of the Clinton Foundation, launched an initiative called the Enhanced Livelihood Investment Initiative to improve the lives of farmers and their communities in Africa, South Asia, Latin America and the Caribbean. The initiative involved a three-year, $10 million commitment to improve the economic lives of farmers by creating and improving privately held companies which links the farmers to Unilever's global supply chain and distribution network. [10]
The challenges in this initiative involve difficulty in accessing and adopting beneficial agricultural innovations as well as the company's challenge in providing it and still remaining profitable. This partnership helps in overcoming these challenges by developing repeatable models to scale the adoption of agricultural innovations. [10]
LifeSpring Hospitals
LifeSpring Hospitals is a joint venture of Acumen and Hindustan Latex Limited to provide women with a cheaper and accessible way of childbirth. It started in 2005 when Anant Kumar, CEO of HLL (now known as HLL Lifecare) travelled to hospitals to talk to women about family planning practices and contraceptive use. Kumar found out that most women were unsatisfied with the level of care at public hospitals, some were so frustrated that they would take out loans to finance visits to private facilities. [11] [12] [13] [13] In December 2013, LifeSpring Hospitals decided to raise $3.2 million to fund its expansion plan and to set up another maternity home. [14]
Agricultural adaptation
In November 2024, the company announced it planned to establish a fund to support subsistence farmers in the developing world adapt to the impact of climate change. [18] As part of the program, Acumen will contribute $300 million to the fund and will seek further investment of up to $1.2 billion across 2025. [18] The program will seek to increase production and income for 40 million farmers by investing in 100 start-ups at pre-seed, seed and growth stages in Pakistan, India, West and East Africa and Latin America. [18]
This page is based on this
Wikipedia article Text is available under the
CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.
